'HPI should be capped at 5%' - RICS

Carl31

Further concern that runaway HPI is bad for the UK
I can't see how they could ever implement the measure as prices vary so much regionally, but action may start to deter those using houses for investment

mystic_trev

Links.

http://www.bbc.co.uk/news/business-24066371

http://www.telegraph.co.uk/finance/personalfinance/houseprices/10305771/House-price-inflation-should-be-capped-at-5pc-RICS-says.html

the_flying_pig

If RICS are saying it then, well...

Carl31

mystic_trev wrote: »

Links.

http://www.bbc.co.uk/news/business-24066371

http://www.telegraph.co.uk/finance/personalfinance/houseprices/10305771/House-price-inflation-should-be-capped-at-5pc-RICS-says.html

Thanks

I did try posting a link to the telegraph, didn't work

chucky

Carl31 wrote: »

Further concern that runaway HPI is bad for the UK
I can't see how they could ever implement the measure as prices vary so much regionally, but action may start to deter those using houses for investment

Nice articles but how do they implement this across regions?! How would you stop Hamish's HPI in Aberdeen at 6% while in Wigan Percy's house has lost 3% of it's value.

The Bank of England don't have the power to be so accurate in their policy or management of house prices.

the_flying_pig

Wouldn't it be hilarious if, during an election build up, Gideon was doing his damnedest to blow a bubble but his own hand picked 'dovish' BoE head was carefully pricking little holes in it at the same time.

Graham_Devon

Good stuff.

The Bank “should consider limiting annual house price inflation to 5pc in order to prevent another housing bubble, reckless bank lending and a dangerous build up in household debt”, RICS said. “This policy would discourage households from taking on excessive debt out of fear of missing out on a price boom, and discourage lenders from rushing to relax their lending standards as they compete for market share.”

How can anyone suggest that's a bad thing!?

chucky

the_flying_pig wrote: »

Wouldn't it be hilarious if, during an election build up, Gideon was doing his damnedest to blow a bubble but his own hand picked 'dovish' BoE head was carefully pricking little holes in it at the same time.

Why would anyone want to create a house price bubble?

chucky

Graham_Devon wrote: »

Good stuff.



How can anyone suggest that's a bad thing!?

Not sure if anyone will say it's a bad thing but if anyone thinks it can be implemented across the country they must live in Lala Land or they don't understand how averages work.

Graham_Devon

chucky wrote: »

Not sure if anyone will say it's a bad thing but if anyone thinks it can be implemented across the country they must live in Lala Land or they don't understand how averages work.

Good thing no one is suggesting that it's done on a postcode basis then.

Different parts of the country have always lost out / benefited on national policy, so I don't see why such a fuss is now being made on a local basis over this.

Other than we have to find a reason it won't work to protect our precious HPI....

Don't see you complaining that help to buy gives you the same percentage in the North East as it does Central London. But then that just helps increase HPI, so I guess theres little concern over the very same issue.

chucknorris

chucky wrote: »

Nice articles but how do they implement this across regions?! How would you stop Hamish's HPI in Aberdeen at 6% while in Wigan Percy's house has lost 3% of it's value.

The Bank of England don't have the power to be so accurate in their policy or management of house prices.

I agree that they should try and 'dampen' house price increases by encouraging lenders to be harsher with their lending policies when house prices are increasing significantly. But as you say regional differences make that difficult to deploy, what would happen is that prices would be flying in regions like London but more modest rises occurring in some other areas. But I think rather than have a boom/bust it would be better to move towards a softer landing by introducing tighter lending policies to stem the upward pressure on prices when they are in full flow (that's not yet though, we are only just starting to recover).